Risks to the U.S. financial system remain moderate, though factors outside the U.S. -- including Brexit -- could potentially threaten financial stability in the months ahead, the Financial Stability Oversight Council said today in its annual report.

Risks to the U.S. financial system remain moderate, though factors outside the U.S. — including Brexit — could potentially threaten financial stability in the months ahead, the Financial Stability Oversight Council said today in its annual report. The council also noted that an increasing federal government debt burden could negatively affect financial stability in the long-term.

The council added, however, that as a result of post-crisis financial reforms, the U.S. financial system is “clearly stronger and much better positioned to withstand a shock or an economic downturn than it was before the financial crisis.” Additionally, the passage of S. 2155 earlier this year should provide further opportunities to appropriately tailor financial regulations, the report said.

Created by the Dodd-Frank Act, FSOC is chaired by the Treasury secretary and includes the heads of almost all federal financial regulatory agencies, as well as an independent insurance expert. The council noted that it also continues to focus on cybersecurity, effective regulation of central counterparties and the transition away from Libor, among other things.